Adidas India Marketing Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5919/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3727 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 24-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Keywords: Unexplained cash credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO. 5919(DEL)2010 ASSESSMENT YEAR: 2003-04 ADIDAS INDIA MARKETING PVT. LTD., JT.COMMISS IONER OF I.TAX, C-2, ANSAL VILLA, SATBARI, N.DELHI. V. CR BLDG., NEW DELHI. (APPELLANT) (RESPOND ENT) APPELLANT BY: SHRI ANIL JAIN, CA RESPONDENT BY: MS. ANUS HA KHURANA, SR. DR ORDER PER A.D. JAIN, J.M . THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2 003-04, RAISING THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN UPHOLDING THE AOS ACT OF TREATING DEP OSIT OF ` 26,80,000/- RECEIVED BY THE APPELLANT DURING THE YE AR FROM ITS FRANCHISE AS UNEXPLAINED CASH CREDIT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN UPHOLDING THE AOS ACT OF ADDING A SUM OF ` 26,80,000/- IN APPELLANTS INCOME SIMPLY ON THE BAS IS OF NON-FILING OF TRADITIONAL CONFIRMATION IN SPITE OF THE FACT WHEN ALL OTHER SUFFICIENT EVIDENCES WERE PRODUCED T O PROVE THE GENUINENESS OF THE TRANSACTION. ITA NO.5919(DEL)2 010 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN HOLDING THAT APPELLANT IS NOT ENTITLED TO FILE FRANCHISES CONFIRMATION FOR DEPOSIT MADE BY THEM A S ADDITIONAL EVIDENCE IN SPITE OF THE FACT THAT IT ST OOD ADMITTED BY HIS PREDECESSOR IN OFFICE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN NOT CONSIDERING OTHER EVIDENCES FILED BY T HE APPELLANT WHEN THE SAME WERE NOT REJECTED BY HIM NO R ANY OBJECTION WAS RAISED BY THE AO ON THEM. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN IGNORING THE FACT THAT SECOND APPLICATION U/S 46A WAS FILED AT THE BEHEST OF THE PREDECESSOR IN OFFIC E OF CIT(A) THEREFORE THE SAME CANNOT BE SUMMARILY REJEC TED AND MORE SO WHEN THE AO HAS NOT OBJECTED TO OTHER EVIDENCES FILED ALONG WITH CONFIRMATIONS. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN UPHOLDING THE AOS ACT OF DISALLOWING A SUM OF ` 7,00,861/- BEING INTEREST PAID ON DEPOSIT RECEIVED FROM ITS FRANCHISEES. 2. THE ASSESSEE IS A SUBSIDIARY OF ADIDAS INDIA PRI VATE LIMITED, A MNC. DURING THE YEAR, IT HAD RECEIVED LOANS FROM ITS FOUR PERSONS, AS FOLLOWS:- ` CJS MARKETING 80,000/- VAISHNAVI ENTERPRISES 20,00,000/- ROYAL SAFE CO. 5,00,000/- CEE JOYZ ENT. 1,00,000/- 26,80,000/- ---------------- ITA NO.5919(DEL)2 010 3 3. BEFORE THE AO, THE ASSESSEE COULD NOT FURNISH CO NFIRMATION IN RESPECT THEREOF AND THE ASSESSEE TREATED THE AMO UNT AS UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSE E. 4. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. 5. CHALLENGING THE IMPUGNED ORDER, THE LEARNED COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE AOS ACTION OF TREATING THE DEPOSIT O F ` 26,80,000/- RECEIVED BY THE ASSESSEE DURING THE YEA R FROM ITS PARTNERS/FRANCHISEES, AS UNEXPLAINED CASH CREDIT; THAT THE LD. CIT(A) ERRED IN UPHOLDING THE AOS SAID ACTION SIMP LY ON THE BASIS OF AOS NON-FILING OF CONFIRMATIONS, EVEN THO UGH ALL OTHER EVIDENCES WERE PRODUCED TO PROVE THE GENUINENESS O F THE TRANSACTION; THAT THE LD. CIT(A) ERRED IN HOLDING T HAT THE ASSESSEE WAS NOT ENTITLED TO FILE THE CONFIRMATIONS AS ADDIT IONAL EVIDENCE BEFORE THE LD. CIT(A), EVEN THOUGH IT STOOD ADMITTE D BY HIS PREDECESSOR; AND THAT THE LD. CIT(A) HAS ERRED IN N OT CONSIDERING THE OTHER EVIDENCE FILED BY THE ASSESSEE, EVEN THOU GH THE SAME WERE NOT REJECTED, NOR OBJECTED TO BY THE AO. ITA NO.5919(DEL)2 010 4 6. THE LD. DR, ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 7. IN THIS REGARD, WE FIND THAT THE REQUISITE CONFI RMATIONS COULD NOT BE FILED BY THE ASSESSEE BEFORE THE AO, S INCE THE ASSESSMENT ITSELF WAS TAKEN UP IN THE MONTH OF FEBR UARY AND IT WAS GETTING TIME BARRED IN THE MONTH OF MARCH. IN SUCH A CIRCUMSTANCE, THE LD. CIT(A) OBVIOUSLY ERRED IN NOT ADMITTING THE CONFIRMATIONS AS FILED BY THE ASSESSEE AT THE FIRST APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS REMITTED TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON CONSIDERIN G THE CONFIRMATIONS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A). THE ASSESSEE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF HEARING AND THE ASSESSEE, NO DOUBT, SHALL CO-OPERATE IN THE FRE SH ASSESSMENT PROCEEDINGS. 8. THE AO FURTHER DISALLOWED A SUM OF ` 7,00,861/- BEING INTEREST PAID ON DEPOSIT RECEIVED BY THE ASSESSEE F ROM ITS PARTNERS/FRANCHSEES. THE LD. CIT(A) DECIDED THIS ISSUE ALSO AGAINST THE ASSESSEE, OBSERVING THAT IT HAD A CLOSE NEXUS WITH THE ITA NO.5919(DEL)2 010 5 ADDITION OF ` 26,80,000/-(SUPRA), WHICH THE LD. CIT(A) HAD ALREADY DECIDED AGAINST THE ASSESSEE. 9. SINCE THE ISSUE OF THE SUM OF ` 26,80,000/- HAVING BEEN TREATED AS UNEXPLAINED CASH CREDIT HAS BEEN REMITTE D TO THE FILE OF THE AO, AS ABOVE, THE ISSUE OF INTEREST OF ` 7,00,861/-, BEING INTEREST PAID ON THE AFORESAID DEPOSIT RECEIVED BY THE ASSESSEE IS ALSO REMANDED TO THE AO, FOR DECISION AFRESH IN ACC ORDANCE WITH LAW, IN KEEPING WITH THE DECISION TO BE ARRIVED AT WITH REGARD TO THE DEPOSIT OF ` 26,80,000/-. 10. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.06.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 10.06.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ITA NO.5919(DEL)2 010 6 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR.